Nickel Market Dynamics Intelligence

I. Recent Price Trends

* International Market: LME nickel futures prices have shown a volatile upward trend recently. As of May 22, 2026, the LME nickel spot settlement price stood at USD 18,875.00 per metric ton, recovering from earlier lows.
* Domestic Market: Shanghai Futures Exchange (SHFE) nickel futures prices also demonstrated strength. On May 25, the SHFE nickel next-main-contract closed at RMB 144,390 per ton, up by 1.31%; the main-contract closed at RMB 142,120 per ton, down by 1.19%, yet overall remaining at a relatively high level.

II. Supply and Demand Situation

* Supply Side:
* Indonesia—the world’s largest nickel ore producer—has implemented significant policy adjustments that profoundly impact the global nickel market. In 2026, Indonesia’s nickel ore mining quota was sharply reduced from 379 million tons in 2025 to 260–270 million tons, representing a decline of approximately 30%, resulting in insufficient domestic nickel ore supply to meet downstream demand.
* Indonesia has also revised upward the nickel ore pricing coefficient and incorporated by-product minerals—including cobalt, iron, and chromium—into the Mineral Benchmark Price (HPM) calculation, further increasing nickel ore production costs.
* The closure of the Strait of Hormuz has disrupted Middle Eastern sulfur exports, triggering a chain reaction that severely affects Indonesian Mixed Hydroxide Precipitate (MHP) production—highly reliant on Middle Eastern sulfur supplies—and significantly raising auxiliary material costs.

* Demand Side:
* Global nickel demand is primarily concentrated in the stainless steel and battery sectors. In stainless steel, data from the International Stainless Steel Forum (ISSF) shows that global 300-series stainless steel production increased by 5.5% year-on-year in 2025, driving corresponding growth in nickel demand.
* In the battery sector, surging demand for new energy vehicles continues to fuel robust nickel consumption. Battery-related nickel usage is projected to account for approximately 17% of total global nickel demand in 2026.

III. Market Developments and Key Events

* Policy Impact: Policy adjustments by Indonesia’s Ministry of Energy and Mineral Resources have profoundly reshaped the nickel market’s supply-demand landscape. Going forward, Indonesia’s nickel ore supply is expected to dominate nickel price trends.
* Inventory Changes: Nickel inventory levels at both the LME and SHFE significantly influence market pricing. Recently, LME nickel inventories have fluctuated, while SHFE nickel warehouse receipts have risen, reflecting subtle shifts in supply-demand dynamics.
* Corporate Developments: Price adjustments by major producers—such as Jinchuan Nickel—also affect market pricing. For instance, on May 23, 2026, Jinchuan Nickel raised its ex-factory price, further pushing up market prices.

IV. Analysis, Outlook, and Forecast

* Price Trend:
* In the short term, nickel prices are expected to remain elevated, supported by Indonesia’s policy tightening, rising auxiliary material costs, and sustained strong demand.
* In the long term, rapid expansion of the global new energy industry and steady growth in stainless steel demand are likely to lift the structural price floor for nickel.

* Supply-Demand Balance:
* On the supply side, the contraction in Indonesia’s nickel ore output will be the dominant constraint over the near-to-medium term. Should Indonesia’s Ministry of Energy and Mineral Resources strictly enforce its mining quota policy, a global primary nickel supply deficit may emerge, reversing the prior supply-demand balance.
* On the demand side, continued growth in stainless steel and battery applications will sustain nickel price support. Moreover, global economic recovery and the rise of emerging markets are expected to further expand overall nickel demand.

* Risk Factors:
* Unexpected increases in global nickel ore or primary nickel supply could lead to downward pressure on nickel prices.
* Weakness in global stainless steel demand—or technological innovations in lithium-ion battery materials reducing nickel dependency—could negatively impact nickel demand and prices.
* Geopolitical risks and changes in trade policies may introduce additional uncertainty into the nickel market.